Schreiber trial begins in Germany

The trial has begun in Germany for Karlheinz Schreiber, a German-Canadian businessman accused of tax evasion for his role in a 1990s political financing scandal.

Charged with tax evasion in international deals

The trial has begun for Karlheinz Schreiber, a German-Canadian businessman extradited from Canada to Germany last summer to face charges of tax evasion over his role in a political financing scandal dating back to the 1990s.

Prosecutors in Augsburg, Germany, accuse Schreiber of failing to declare millions from kickbacks he is said to have received for the sale of helicopters to Canada's coast guard and Airbus planes to Air Canada in the 1980s, as well as airliners to Thailand and tanks to Saudi Arabia.

German businessman Karlheinz Schreiber arrives at a courtroom in Augsburg, southern Germany, on Monday to face charges of tax evasion, breach of trust and accessory to fraud. ((Matthias Schrader/AP))
Schreiber, 75, a former arms-industry lobbyist, also faces charges of breach of trust and accessory to fraud.

In Canada, Schreiber became involved in controversial dealings with former prime minister Brian Mulroney, who served from 1984 to 1993. Schreiber claimed Mulroney agreed to take money from him while still in office. Mulroney has denied wrongdoing, though he acknowledged accepting $225,000 Cdn in cash from Schreiber after leaving politics.

Although no formal pleas are entered in the German system, Schreiber's lawyer, Jan Olaf Leisner, told the court his client rejects all charges against him, insisting that the political context of the deals has not been taken into consideration.

"The tone was set by high-ranking politicians," Leisner said.

Allegations that Schreiber gave cash to the treasurer of former German chancellor Helmut Kohl's Christian Democrats in 1991 triggered a scandal that deepened with Kohl's 1999 admission that he had personally accepted off-the-books — and therefore illegal — donations from supporters. Kohl was Germany's chancellor from 1982 to 1998.

If found guilty, Schreiber faces up to 10 years in prison. He  was arrested in Canada in 1999 under a German warrant seeking his extradition. He was released on bail from a Canadian jail in late 2007, and last August he was sent to Germany after losing a 10-year battle against extradition.